Budget Allocation and Management

The NeAT activity represents a complex challenge where multiple organisations are being asked to work together so that enduring new services might be developed.

It is important then, that funding is managed in an open and effective manner.

Several overall decisions have been made that can be reported:

• Expenditure is paid quarterly in arrears based on effort delivered against the agreed project plan
• Processes have been established to undertake that review in the last month of each quarter and transfer payment within 2 weeks after the end of the quarter
• Round 1 projects were allocated a two year budget as detailed below
• A nominal allocation was made for a third year, also detailed below, however any actual third year allocation will be a decision resulting from the Round 1 project reviews to be held in September 2009
• Round 2 projects will be allocated a two year budget which must be expended within the two years.

Funding Allocations

The following allocations have been made to projects completed, underway or expected as part of the Round 1 service developments:

All Round 2 projects have a nominal allocation of $500,000, to be revised up or down based on project planning, and scheduled across the final two years of NeAT funding.

Expenditure Requirements

Expenditure against these budget allocations needs to occur within agreed project plans. That expenditure is almost certain to fall short due to delays in commencement, delays in staffing assignment and re-assignment, and because activities may not occur as quickly as originally planned.

Nevertheless, NeAT funds need to be managed within projects and in aggregate in a way that ensures related expenditure occurs within the appropriate years. In any one year, funds which cannot be deployed against a project could be re-scheduled or re-deployed to other projects, so that additional services may be created or the overall deployment of new services accelerated.

Noting the delays which have occurred in approving and agreeing round 1 projects and the potential for similar delays in the commencement of round 2 projects, the following re-scheduling arrangements will apply to assist projects adapt their activities within the funding profiles allocated:

• A carry over of up to 50% of the 2008/09 allocation (2 quarters) will be allowed into July 2009 for each round 1 project
• A carry over of up to 25% of the 2009/10 allocation (1 quarter) will be allowed into Jul 2010 for each round 1 and round 2 project
• Every project must fully expend its allocated funds by the end of the 2010/11 financial year

Unspent funds in excess of these amounts, or funding which is unlikely to be spent, will be re-allocated to other NeAT projects at the commencement of the respective financial year.

Round 1 projects will need to demonstrate a plan which can fully expend allocated budget during the agreed project period, as part of the NeAT reviews planned for September 2009. Projects which are unconvincing about their ability to fully expend funds will have to have their budgets reduced at that time.

Round 2 projects will need to demonstrate their ability to fast start, or to operate with differential first and second year budgets and still deliver.

-- RhysFrancis - 02 Mar 2009